I own, that if a loan could be completed to the amount of the whole fourteen millions, or if it could be even carried further, it would be adviseable, under the present situation of things, to go very great lengths, in obtaining money. But this is not the question; and as I think the step, which you may now take, will be much examined by the public, I will endeavour to present the case to you in a plain, simple view.1

You were authorized to borrow fourteen millions of dollars; that is two for the sinking fund and twelve for the foreign debt. You gave authority to borrow to the whole amount to Colo. Hamilton. In this sense his power is complete without any additional one; or in other words, a loan made under your first power would be binding upon the U.S.2

But in your instruction of 28th of August 1790, you prohibit him from borrowing more, than as much as will be necessary for completing the instalments or parts of the principal of the foreign debt, and the interest thereon to the end of the year 1791; unless the foreign debt can be changed to advantage. As no such charge could be made in the foreign debt, no more money was borrowed than what should be necessary to pay those instalments and the interest.

Hence Colo. Hamilton was under a necessity in August 1793 to obtain a relaxation of the instruction of the 28th of Aug: 1790, or he could not have borrowed one shilling more; as he did not, nor does now contemplate to change the foreign debt.

The instruction was accordingly relaxed by another on the 8th of Aug. 1793, in which you say, that the money to be borrowed shall be applied to purchases of the public debt.3 The same thing had been said in your letter to Colo. Hamilton of the 27th of July. He was privy to the course, which the thing had taken in your mind: he made no objection—he drew the instruction in August 1793—the appropriation was demonstrably right at that time—nothing has occurred since to make it wrong—but the idea is, that the situation of public affairs requires that the money borrowed should be held ready for any other purpose.

I am persuaded, that this cannot be done now by the President; because he has shewn by his last instruction, that he would probably not have assented to the loan at all; if it had not been for the purpose of the sinking fund. He has once executed the power, which he had under the law; and he cannot execute it over again.

I shall not deny, however, that there may be great cases, in which appropriations must be diverted; nor yet, that the present may be one of them. But still the proper authority must do this. That proper authority is not the President, but congress and congress alone.

It is of real importance to consider, how far this change of appropriation may involve the President in past transactions. For it certainly will be said, that if the President could change his own appropriations, so might the Secretary of the treasury, to whom he gave such full powers—Indeed, I will not undertake to say, what would be the operation of this act, which is proposed to you.

I cannot see the full extent of the measure; but I see perfect safety, as well to yourself as to the public, by sending a letter, like this in substance to Colo. Hamilton.

“I cannot, under all the circumstances of the case, satisfy myself, that I am at liberty to go contrary to my last instructions; and that I have authority to direct the money, which I have expressly directed to be applied to the purchase of the public debt to be applied to any other object. Still however I am willing, that the embarrassments, which you consider as probable, shall be communicated to congress; and I have no objection to recommend to them to order the money to reserved for the exigencies, which you point out.” 4 I have the honor, sir, to be with the highest respect Yr mo. ob. serv.